Strengthening Parent Company Liability for Environmental Harm in India
Keywords:
Corporate Accountability, Corporate Veil, Environmental Liability, Indian Jurisprudence, Limited Liability, Parent Company Liability, Separate Legal Personality, Subsidiary CompanyAbstract
This research paper assesses the complex relationship between corporate limited liability and environmental protection in a progressively globalised world, focusing particularly on the doctrine of lifting the corporate veil to hold parent companies accountable for environmental violations committed by their subsidiaries in India. It argues that the standards for lifting the veil are very harsh thereby making it a complex task to hold the parent companies liable for the misuse of the resources. This study
analyses whether and under what circumstances should the corporate veil be lifted in environmental issues by conducting a comparative study of Indian jurisprudence and other common law jurisdictions, especially the United Kingdom. The paper also brings to light the significant gaps in the current Indian legislation regarding parent company liability and advocates for a statutory framework. Recognising the environment as a key stakeholder in corporate governance, the research suggests that creating a regime of “eco-liability” that would strike a balance between corporate interests and preservation of environment, as companies are not only engines of profit but they also bear significant responsibilities towards social aggregate welfare.
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